Failed crypto lending platform, Celsius, is on the brink of initiating the process to reimburse its clients. The plan involves returning over $2 billion in digital assets to customers, and has garnered the approval of creditors.
Legal filings pertaining to the Celsius case reveal that the company's bankruptcy team secured approval from 95% of former users to implement their proposed resolution.
One Final Step...
However, the plan's execution still hinges on judicial approval, which will be sought during a hearing at the Bankruptcy Court in the Southern District of New York, where the final plan to return user funds will be determined.
The reorganization strategy of Celsius orders the allocation of approximately USD 2.03 Billion, denominated in BTC and other cryptocurrencies, to creditors. The Celsius team notes that the coin's value is susceptible to the volatile nature of the crypto market.
Moreover, the reorganization plan, portrayed as a "swift and feasible route" to navigate out of bankruptcy and ensure maximal fund recovery for clients, envisions the formation of a new cryptocurrency entity.
The Remaining Celsius Leftovers Will Be Used to Create a Whole New Company...
This new company, dubbed "NewCo", will fall under the management of Fahrenheit Group, a consultancy firm. According to Celsius's plan, the crypto firm “will prioritize customer ownership and will concentrate on Bitcoin mining and Ethereum staking.”
The plan also states that NewCo, serving as the conduit through which Celsius client funds would be disseminated, will be endowed with up to USD 450 million in cryptocurrencies to fuel its development.
Celsius Network was a prominent cryptocurrency entity in the United States until it filed for bankruptcy July 2022. Although its downfall was triggered by the collapse of Luna and the Terra protocol, in which it was heavily invested, many attribute the company's failure to an unsustainable business model, saying that Celsius would collapse in a dramatic way, sooner or later.
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Author: Oliver Redding
Seattle Newsdesk /
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